ET Now: Your call on the cement pack? What do you think is holding up the basket and should one utilise this as a buying opportunity for cement?

Ashu Madan: I do not think it is a buying opportunity because we have to wait for the impact. There were some expectations built onto it and obviously people were shying away from the fact that still it was outperforming the market. So, there was the perception that whenever this will happen, it will have a negative impact. So immediate reaction, the muted reaction is because of that. But the impact has to be analysed in a way and one has to wait for a couple of days where actually the price movement pans out to.

ET Now: But what about the broader markets because given the way the rupee is moving, one does not seem to be getting any sort of positive cues in the near term? Do you think the weakness will persist?

Ashu Madan: In the near term, it has a lot to do with our expiry which is an important factor. Otherwise if you look at it, there are considerable short position systems. If you analyse the last 15 days, there was a huge expectation from the RBI policy. It did not happen. So the immediate action was a knee-jerk reaction and post that, everybody was bearish on the market. There was an expectation on QE3. It did not happen. The US markets corrected. So again there was a knee-jerk reaction and everybody thinks that the market is negative. The market is refusing to go down with the dollar panning out. There is absolute panic if somebody from outside views dollar. The rupee has depreciated more than 1% recently. So it will have a very negative impact, but the immediate reluctance for the market to go down is probably our expiry position or the open interest which is probably skewed on the negative side and people are bearish and that is why it is holding out. So the next 3-4 days, it is very important how do we play the market considering the bad news flow and also the positions which have been built over a period of time. So that is the reason the market is refusing to go below 5100 and we should respect that level as of now.

ET Now: Do you think the crude cool off as well has a part to play in the kind of resistance that we are seeing in the index?

Ashu Madan: When the crude was moving up and aggressive targets were being given, there was absolute panic and out of that fear also, that futuristic position depends on. Smart money plays a very important role, it is the first to catch this movement. So crude plays a very important role because it soothes the ongoing trend which we feel that if it remains at a lower level, then we are going to benefit for a considerable long period for future. So certainly is helpful.

ET Now: What about reforms? Is an expectation also getting built in now that once the presidential polls are over and once we get a new finance minister, probably we will see some of the reforms happen, probably some diesel price hike, FDI in retail? Do you think some of these could kick in and that would improve the overall market sentiment?

Ashu Madan: Certainly, last year, it used to happen on the negative side, whether it is on rate cut expectation or reform expectation. As long as reforms are not happening, as long as the rate cut is not happening, every next time, there is the hope. So that has become a silver lining of things not happening, things not moving, but every time, every month on month, there is an expectation, probably now is the time, probably now after presidential election, probably now after some new equation in the coalition. So that expectation is also holding the market. Whether it happens or not happens, but it will keep on lending its support to the market whenever there is a dip. That is why we are currently saying that whenever there is a panic, the market is currently 'buy' on dips.

ET Now: So with the crude cool off, is it time to buy OMCs then?

Ashu Madan: I am not too bullish on OMCs. Generally, I trade them only closer to when there is a news flow. Otherwise, I normally watch academically. I am not too bullish. BPCL is the only stock which we like at times, but other than that, I am not too gung ho on OMCs other than the trading play available at different time intervals.

ET Now: So what sectors would you then advise medium-term investors to look at from an investment point of view?

Ashu Madan: It is difficult to identify these factors. FMCG is continuing to be in a bull run of its own. So there is an outperformance definitely there. Pharma is performing, but I still feel that time has not come that we are able to identify the sectors. At times, the infrastructure is overdone, the worst is over probably we feel and suddenly there is a spike. But still on a sustained basis or with full conviction, still there is a time when we are able to identify that these are the sectors if the market rallies or even if it does not rally, they will outperform. So we still have to play the broader market and probably the index.